Spread Betting 25 Aug 2010
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For today's update see Spread Betting.
The Daily Update from Anthony Grech, Research Analyst, IG Index.
Spread Betting 25 August 2010: 11.30am Update
The FTSE 100 is drifting somewhat this morning, fluctuating on mixed earnings from various sectors.
London's blue chip index is performing with little distinction, unsettled as it is by mixed earnings results and stuttering, somewhat, after yesterday's sell-off.
At 10.45 (London time) the FTSE was down 22.20 points (-0.43%) to 5133.75. The broader FTSE 250 index is performing marginally better, up 8.44 points (+0.09%) to 9709.35.
In Europe, the leading continental indices are mirroring London's FTSE 100, with each lurking just below their opening levels. France's CAC 40 is down to 3472.00, a drop of 19.11 points (-0.55%), while the Dax 30 in Germany is currently trading at 5915.39, down 20.05 points (-0.34%).
Insurance group Admiral sits atop the FTSE 100 this morning after the company announced solid earnings results today. The insurer reported record half-year pre-tax profits of almost £127 million, up 21% on the same period last year.
As well as profits exceeding expectations, the group also saw its turnover rise 33% to £720.5 million. At 10.45am (London time) Admiral's share price was up 64p (+4.34%) to 1537p.
In-the-news BHP Billiton reported annual profits to June of £12.7 billion, almost 70% up on the previous 12 months. The company attributed its impressive gains to a recovery in commodity prices, but cautioned that the outlook for commodities going forward is uncertain, with prices dependent on the levels of demand from emerging markets. [1]
BHP is currently involved in a hostile takeover bid for Canadian potash miner Potash Corp. BHP's share price was unchanged at 10.45 in London this morning.
The standout loser on the leader board this morning is Tullow Oil, down 69.00p (-5.32%) to 1228.00p, after the company reported there may be delays in its acquisition of Heritage's Ugandan assets. The Ugandan government is withholding its approval of the acquisition on a tax dispute, although Tullow Oil is confident the delay will only be 'in the very short term'. [2]
Tullow is the UK explorer with the most licenses in Africa and hopes to pump about 200,000 barrels of oil a day from two blocks in the Lake Albert basin in Uganda by 2014.
Across the Irish Sea, Standard and Poor's (S&P) has downgraded the Republic of Ireland’s credit rating from AA to AA-. The ratings agency based the cut on fears that the Irish government will have to spend around 10 billion Euros more than previously estimated supporting the country's struggling banking sector. The Irish government's own debt agency has labelled S&P's action as 'flawed', saying it is based on an 'extreme' scenario.
Following yesterday's drastic drop in existing US home sales figures, investors will be eagerly watching this afternoon's data out of the US for signs either confirming or mitigating the damage. July's US durable goods orders are scheduled for 1.30pm, but the US new home sales for July data release at 3pm will be under special scrutiny following yesterday's disappointing figures. [3]
Sources: [1] BBC News (25 August 2010),
Sources: [2] Bloomberg (25 August 2010),
Sources: [3] BBC News (25 August 2010).
The above comments do not constitute investment advice and neither IG Index nor SpreadBets.org.uk accept any responsibility for any use that may be made of them.
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Spread Betting 25 August 2010: 06.30am Update
In overnight action, major US indices tumbled as a record plunge in home sales further stoked concerns over a double-dip recession.
The session saw the Yen spread betting market surge to its highest level versus the US Dollar since 1995. Ten year Treasury yields also fell to the lowest level in 17 months as money flooded perceived safe-haven assets.
The NASDAQ was the worst performer, down 1.7% while the broad-based S&P 500 fell 1.5% and the Dow Jones Industrial Average lost 1.3%.
In Asia, regional markets are all lower following the weaker overseas leads, with Japanese stocks remaining under pressure due to a rampant Yen.
As at 06:00, the Nikkei 225, Shanghai Composite and Kospi are all down 1% while the Hang Seng is only weaker by 0.3%.
In Australia, the ASX 200 is currently 1.2% weaker at 4328, right on its lows of the day. The market had been quite resilient for most of the morning but has rapidly deteriorated in early-afternoon trade along with the rest of Asia.
Losses for the day are both heavy and broad-based, with the heavyweight materials, financials, and energy sectors among the worst performers.
Despite Asian markets following the move lower, we're looking at a rather flat start to trade in Europe as traders take stock of the move south. Nonetheless, it certainly seems too early to suggest that the bargain hunters are ready to move back in.
Given the current mindset of risk aversion it seems somewhat unlikely that today's fundamentals can precipitate any significant change but German IFO data and US durable goods orders will both be under scrutiny.
The earnings calendar is relatively quiet too with little in the way of high profile reports due and with the long weekend approaching in London, the temptation could well be to hold off from any buying, however keen the price, until next week.
Ahead of the open we're calling the FTSE spread trading market up 6 at 5162, the DAX down 3 at 5932 and the CAC down 1 at 3490.
The above comments do not constitute investment advice and neither IG Index nor SpreadBets.org.uk accept any responsibility for any use that may be made of them.
Advert:
IG Index Spread Betting - No Fees, No Commissions, Free Charts and Live Prices.
Spread Bet on Indices, Forex, Commodities, Shares and more. For details see IG Index.
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"Spread Betting 25 Aug 2010" last update by AG, 25-Aug-2010
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